Haniya was formally asked by Abbas to form a government nearly four weeks ago in the wake of the Islamists' stunning victory over the formerly dominant Fatah faction in the Jan. 25 parliamentary election.

He has since tried to persuade the likes of Fatah and smaller parties to sign up to a broad-based national coalition but his efforts have been in vain.

Fatah refused to join a government that would not respect the international agreements it brokered with Israel, with many of its leaders happy to sit back and watch how Hamas deals with a host of problems including a burgeoning financial crisis.

Other secular parties such as Independent Palestine and the Third Way also declined.

The leftist Popular Front for the Liberation of Palestine is still mulling whether to join and is consulting its exiled leadership.

Hamas sources said the group's hardline parliamentary leader Mahmud al-Zahar had been nominated as foreign minister, while Omar Abdul Razeq, who has only just been released from Israeli custody, would take the finance portfolio.